Cheaper currencies and long-term growth: The effect of exchange rate management and capital controls
© 2020 John Wiley & Sons Ltd In this paper, we test whether weakening the domestic currency can help boost economic growth. To estimate this policy-relevant but yet complex link, we apply a new mediation analysis to isolate the long-term growth effects of currency undervaluation induced by act...
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th-mahidol.608912022-06-03T16:38:29Z Cheaper currencies and long-term growth: The effect of exchange rate management and capital controls Phornchanok Cumperayot Roy Kouwenberg Chulalongkorn University Erasmus School of Economics Mahidol University Business, Management and Accounting Economics, Econometrics and Finance Social Sciences © 2020 John Wiley & Sons Ltd In this paper, we test whether weakening the domestic currency can help boost economic growth. To estimate this policy-relevant but yet complex link, we apply a new mediation analysis to isolate the long-term growth effects of currency undervaluation induced by active exchange rate management and capital control policies. Using a dataset of 182 countries in the post-Bretton-Woods period, we find that changes in undervaluation driven by exchange rate management and capital control policies have no significant impact on long-term growth. In addition, the direct growth effects of these policies are typically negative and offset the small positive impact gained indirectly through increased currency undervaluation. 2021-02-03T05:50:34Z 2021-02-03T05:50:34Z 2020-01-01 Article World Economy. (2020) 10.1111/twec.13081 14679701 03785920 2-s2.0-85099028956 https://repository.li.mahidol.ac.th/handle/123456789/60891 Mahidol University SCOPUS https://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=85099028956&origin=inward |
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Business, Management and Accounting Economics, Econometrics and Finance Social Sciences Phornchanok Cumperayot Roy Kouwenberg Cheaper currencies and long-term growth: The effect of exchange rate management and capital controls |
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© 2020 John Wiley & Sons Ltd In this paper, we test whether weakening the domestic currency can help boost economic growth. To estimate this policy-relevant but yet complex link, we apply a new mediation analysis to isolate the long-term growth effects of currency undervaluation induced by active exchange rate management and capital control policies. Using a dataset of 182 countries in the post-Bretton-Woods period, we find that changes in undervaluation driven by exchange rate management and capital control policies have no significant impact on long-term growth. In addition, the direct growth effects of these policies are typically negative and offset the small positive impact gained indirectly through increased currency undervaluation. |
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Chulalongkorn University |
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Chulalongkorn University Phornchanok Cumperayot Roy Kouwenberg |
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Article |
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Phornchanok Cumperayot Roy Kouwenberg |
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Phornchanok Cumperayot |
title |
Cheaper currencies and long-term growth: The effect of exchange rate management and capital controls |
title_short |
Cheaper currencies and long-term growth: The effect of exchange rate management and capital controls |
title_full |
Cheaper currencies and long-term growth: The effect of exchange rate management and capital controls |
title_fullStr |
Cheaper currencies and long-term growth: The effect of exchange rate management and capital controls |
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Cheaper currencies and long-term growth: The effect of exchange rate management and capital controls |
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cheaper currencies and long-term growth: the effect of exchange rate management and capital controls |
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2021 |
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https://repository.li.mahidol.ac.th/handle/123456789/60891 |
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1763491725393788928 |